Boardwalk Pipeline (BWP) is a natural gas company that specializes in the gathering and processing of natural gas liquids. Boardwalk Pipeline has been trading in a fifty two week range between $11.99-33.00; the stock is currently trading at $18.10. BWP is up $0.64 cents today about a 3.67% move. Year to date the stock has underperformed the market and is down about 29.47% since the start of this year. BWP is currently trading inside the Ichcimoku cloud, however BWP looks like it will break the cloud to the upside. The future cloud also looks to continue this bullish trend. Option traders have a bullish outlook on BWP and think the stock will continue its move upward. Today we saw a trader rolling their 33,000 September 15 calls at $3.30. This trader then purchased 33,000 of the September 17.5 calls for $1.80. Today’s bullish rollover provides a boost of confidence for BWP continued bullish outlook. Today volume has been heavy with 2.9 million shares trading, this is 3X the normal midday trading volume in Boardwalk Pipeline. With today’s big move, an improving cloud set up, and the bullish order flow in BWP; I believe Boardwalk Pipeline is setting up for a long.
Trade: Buy the September 20 calls
Risk: 85 per one lot
Reward: Unlimited
Break-even: 20.85